ING arranges landmark PHP 1.06 bn green bond deal

Helping clients aiming to solve today’s environmental challenges, ING Bank recently arranged the first 10-year local currency green bond issuance from Southeast Asia, denominated in Philippine peso.

The landmark deal will support the renewable projects in the Philippines of Singapore-based Sindicatum Renewable Energy Company Pte. Ltd. (Sindicatum Renewables), a regional developer and owner and operator of clean energy projects. This transaction is innovative given that it is a synthetic local currency issue in Philippine peso but settled in US dollars. Such a structure allows the issuer to have greater US dollar liquidity and to achieve 10-year funding at a more competitive pricing level. The bond is credit guaranteed by GuarantCo, an international development finance institution headquartered in London, helping it to achieve issue ratings of 'A1' by Moody’s.

ING Bank served as the sole lead manager, sole bookrunner, and sole green structuring advisor for the innovative 10-year green bond amounting to PHP 1.06 billion. This was the second green bond issuance that ING Bank arranged and managed for Sindicatum Renewables, following its international green bond debut denominated in Indian rupee for an aggregate amount of INR 2.5 billion in January 2018.

“We are delighted to have successfully completed this landmark Philippine peso-denominated green bond,” said Assaad W. Razzouk, CEO of Sindicatum Renewables. “This transaction was very well received by the market and attracted high quality, long-term investors, allowing us to extend the maturity profile of our debt. We can now expand further our renewable energy footprint in the Philippines where we intend to rapidly build a portfolio of 250 MW of solar and wind assets.”

Hans B. Sicat, country manager of ING Bank in Manila, said the Philippines has ambitious targets to achieve energy efficiency in the coming years and the deal will help the country to achieve these. “We see growing interest by clients in sustainable finance. This deal demonstrates our capabilities to attract long-term sustainability-focused investors in the local market. Being one of the frontrunners in this arena, ING is well-placed to support corporates in the Philippines committed to becoming more sustainable,” he said.

Lasitha Perera, CEO of GuarantCo, said: “We are proud to have closed our second deal with Sindicatum Renewables, following the successful USD 40 million first international corporate Indian rupee green bond in Asia earlier this year. The latest transaction will support green field projects in the Philippines. GuarantCo’s credit guarantee was instrumental in generating interest and ultimately investment commitment and confidence from top life insurance companies in the Philippines.”

The Philippine peso green bond was issued in accordance with both the International Capital Market Association (ICMA)’s Green Bond Principles 2017 (GBP) and the ASEAN Green Bond Standards. This means the borrower must apply the loan to fund specific green projects, preserving the market integrity of the green bonds to fund sustainable, environmental projects.

In the last two years, ING Bank has assisted numerous green bond issuances for Asian financial institutions and corporates, including the USD 500 million green bond debut by DBS in July 2017, the EUR 1 billion green bond issued by the China Development Bank in November 2017, and the two green bonds with a total value of approximately USD 60 million for Sindicatum Renewables in 2018.